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Designing Effective Teacher Performance Pay Programs: Experimental Evidence from Tanzania

Author

Listed:
  • Isaac Mbiti
  • Mauricio Romero
  • Youdi Schipper

Abstract

We use a nationally representative field experiment in Tanzania to compare two teacher performance pay systems in public primary schools: a ‘pay-for-percentile’ system (a rank-order tournament) and a ‘levels’ system that features multiple proficiency thresholds. Pay for percentile can potentially induce socially optimal effort among teachers, while levels systems can encourage teachers to focus on students near passing thresholds. Despite the theoretical advantage of the tournament system, we find that both systems improved student test scores across the distribution of initial learning levels after two years. However, the levels system is easier to implement and is more cost effective.

Suggested Citation

  • Isaac Mbiti & Mauricio Romero & Youdi Schipper, 2023. "Designing Effective Teacher Performance Pay Programs: Experimental Evidence from Tanzania," The Economic Journal, Royal Economic Society, vol. 133(653), pages 1968-2000.
    • Handle: RePEc:oup:econjl:v:133:y:2023:i:653:p:1968-2000.
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    File URL: http://hdl.handle.net/10.1093/ej/uead010
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    Cited by:

    1. Biswas, Kumar & de Galbert, Pierre & Sabarwal, Shwetlena & Glave, Carla Z. & Asaduzzaman, T.M., 2025. "Online training and financial incentives for teachers: Evidence from Bangladesh," Journal of Economic Behavior & Organization, Elsevier, vol. 229(C).
    2. Annie Duflo & Jessica Kiessel & Adrienne Lucas, 2020. "Experimental Evidence on Alternative Policies to Increase Learning at Scale," NBER Working Papers 27298, National Bureau of Economic Research, Inc.
    3. Derek Neal & Joseph Root, 2024. "The Provision of Information and Incentives in School Assignment Mechanisms," NBER Chapters, in: New Directions in Market Design, pages 179-209, National Bureau of Economic Research, Inc.
    4. Berry, James & Kim, Hyuncheol Bryant & Son, Hyuk Harry, 2022. "When student incentives do not work: Evidence from a field experiment in Malawi," Journal of Development Economics, Elsevier, vol. 158(C).
    5. Hossain, Saira, 2025. "Teacher absenteeism, large class size, and performance pressure: Barriers to student well-being at secondary schools in Bangladesh," International Journal of Educational Development, Elsevier, vol. 114(C).
    6. Clare Leaver & Owen Ozier & Pieter Serneels & Andrew Zeitlin, 2021. "Recruitment, Effort, and Retention Effects of Performance Contracts for Civil Servants: Experimental Evidence from Rwandan Primary Schools," American Economic Review, American Economic Association, vol. 111(7), pages 2213-2246, July.
    7. Martina Jakob, Konstantin Buechel, Daniel Steffen, Aymo Brunetti, 2023. "Participatory Teaching Improves Learning Outcomes: Evidence from a Field Experiment in Tanzania," Diskussionsschriften dp2310, Universitaet Bern, Departement Volkswirtschaft.
    8. Kemp, Jack, 2022. "The Educational Impact of Weakening Teachers’ Unions : Evidence from Wisconsin," Warwick-Monash Economics Student Papers 39, Warwick Monash Economics Student Papers.
    9. Filmer,Deon P. & Nahata,Vatsal & Sabarwal,Shwetlena, 2021. "Preparation, Practice, and Beliefs : A Machine Learning Approach to Understanding Teacher Effectiveness," Policy Research Working Paper Series 9847, The World Bank.
    10. Leonard, Kenneth L. & Hompashe, Dumisani, 2024. "Untapped human capital in Africa," International Journal of Educational Development, Elsevier, vol. 109(C).

    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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